You Are on a Team Responsible for Addressing Cash Flow

question 111

Essay

You are on a team responsible for addressing cash flow problems with other managers in your corporate division.Your accounting department has provided your team with the statement of cash flows prepared using the indirect method.At your first meeting, some of the managers have expressed concerns about the statement's understandability and do not view the statement as anything other than a "rearranged income statement".The managers have requested that your team explain to them how the statement is constructed.
Required:
Answer the following questions posed by the managers relating to the investing and financing sections of the statement of cash flows.
a.What types of items are reported in the investing section of the statement of cash flows?
b.How is the book value of a plant asset shown on the statement of cash flows?
c.What types of items are reported in the financing section of the statement of cash flows?

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Definitions:

Fallacy

A mistaken belief, especially one based on unsound arguments or reasoning.

Argument

A series of statements or reasons made to persuade others that an action or conclusion is right or wrong.

Subjectivist Fallacy

This exists when someone insists that something is true simply because it is what they believe, ignoring any evidence to the contrary.

Fallacy

Incorrect reasoning in argumentation resulting from a misconception or distortion of a logical argument.